Quote:The worst drought in the US in at least half a century has destroyed one-sixth of the country’s expected corn crop in a month threatening a surge in global food price inflation.
The US government estimated corn farmers had abandoned fields greater in area than Belgium and Luxembourg after the hottest July in US history irreparably damaged their crops. The harvest for soyabeans, largely crushed into animal feed and vegetable oil, would be the lowest in five years.
The US Department of Agriculture forecast prices for the two crops would break records, with domestic corn averaging between $7.50 and $8.90 per bushel after this year’s harvest starts. On the Chicago Board of Trade, corn futures jumped 3.1 per cent Friday to an all-time high of $8.43¾ before slipping.
“We’re going to see very high prices,” said Joseph Glauber, USDA chief economist.
The failure of the US corn crop will hit the world’s food manufacturers, including Nestlé, Kraft, and Tyson, who have already warned that they will pass on higher prices to consumers.